netrashetty
Netra Shetty
AC Lens is a privately held company based in Columbus, Ohio that sells contact lenses and vision care products online.
Arlington Contact Lens Service, Inc (AC Lens) was formed in 1995 and launched in 1996 by Dr. Peter Clarkson in the back of an optometrist’s office on the campus of The Ohio State University in Columbus, OH[1]. AC Lens incorporated in the State of Ohio in 1998. In 2000, AC Lens acquired I-Ohio LLC in an exchange of private stock[2]. AC Lens now operates various websites including USA and United Kingdom based sites. Dr. Clarkson is a graduate of Southampton University in the UK and The Ohio State University College of Medicine.
On February 4, 2004, the Fairness to Contact Lens Consumers Act went into effect. This federal law requires that optical care providers release their patients' prescriptions to them. AC Lens was provided the opportunity to comment and suggest changes to the FTC on March 31, 2004[3]. The final ruling on the law was released by the FTC in July 2004[4]. In October 2004, the FTC released a A Guide for Prescribers and Sellers
Business Segments
Bausch & Lomb produces and markets eye-care products in five major categories: contact lenses, lens care, pharmaceuticals, cataract and vitreoretinal surgery, and refractive surgery. As distinct segments in the eye-care industry, this product diversification is one way in which the company protects itself from adverse trends in the industry. For example, a change in economic conditions or policy that reduces contact lenses revenue one year may be offset by growth in another segment.
Contact Lenses
Contact lenses represent most important business division, bringing in 31 percent of its total revenue. product portfolio includes traditional, disposable, multifocal (presbyopia correction), and toric (astigmatism correction) soft contact lenses as well as rigid gas permeable (RGP) contact lenses. Some of most popular lines of contact lenses are:
PureVision - One of newest brands, PureVision soft contact lenses are made from silicone hydrogel materials, which are more comfortable and healthier for the eye. As consumers are shifting more to this new technology, sales have experienced double-digit growth. Further growth is expected as the product launches in 2007 in Japan, the second largest contact lens market in the world. new development in contact lenses is focused on expanding the company's silicone hydrogel offerings. (See Silicone hydrogel lenses)
SofLens - The SofLens line of disposable contact lenses are made from traditional hydrogel materials, representing older technology. These lenses are available in toric and multifocal prescriptions, in a variety of disposable forms. Bausch recently expanded this brand with the SofLens Daily Disposable line, which offers a new aspheric optical design, allowing for crisper vision and more comfortable wear. However, SofLens Toric sales have declined due to competition from increased adoption of Baush's own PureVision Toric lenses.
MultiVision (RGP lens) - Unlike their disposable counterparts, rigid gas permeable (RGP) lenses are reused for long periods of time. They are less convenient and less comfortable than soft lenses, but offer better visual performance and specialty prescriptions that are not available for other types of contact lenses.
Contact lens sales declined by 3 percent from the previous year. Even though the contact lens division is separate from lens care, brand image was negatively impacted by the MoistureLoc recall, especially in the Asian market.
Competitors in the contact lens market include CIBA Vision Corporation, CooperVision, and Vistakon Inc.
Lens Care
ReNu is flagship brand of lens care products, including cleaning solutions, re-wetting drops, and saline solutions. ReNu had leading market share prior to 2006, but lost 23.6% of the lens care market within 10 weeks of the MoistureLoc recall. Furthermore, the increasing popularity of inexpensive disposable contact lenses has put pressure on the lens care market, because disposable contacts do not require as much care. For example, one of the primary benefits of daily disposable contacts is that no cleaning solutions are required. Current developments are concentrated in rebuilding brand image and reclaiming lost market share associated with the recall, and also expanding its offerings of multipurpose cleaning solutions, the only growing segment in the overall lens market.
Competitors in the lens care market include Advanced Medical Optics, Alcon, and CIBA Vision Corporation.
Pharmaceuticals
Pharmaceutical products, which includes generic and branded drugs, eyedrops, ocular vitamins, and over-the-counter medications, is second largest business segment. Among pharmaceutical products are Lotemax and Alrex, ophthalmic steroids used to treat ocular inflammation, and PreserVision, a line of ocular vitamins. Bausch holds dominant share in the rapidly growing market of ocular vitamins. This may be a direction important to the development of pharmaceuticals division, as a recently concluded 10-year study suggests eye vitamins may be effective in treating age-related vision loss. (See Ocular vitamins)
In 2005, Bausch acquired a majority stake in CT Freda, a Chinese ophthalmologic pharmaceutical company. With 20% market share in the Chinese market, CT Freda is already established and established company, and is growing rapidly at 15% annually. While pharmaceutical division grew by 13% in 2006, CT Freda accounted for 9% of that growth. In addition, the company shows potential for great profitability, with operating margins above 30%. As a result, CT Freda is likely to become a key player in pharmaceuticals division in the future.
Competitors in pharmaceuticals is fragmented due to the variety of medications.
Cataract and vitreoretinal surgery
A cataract is the clouding of the eye's lens, and is a commonly associated with aging. Cataract surgery involves removing the cloudy lens on the eye and replacing it with an artifical intraocular lens, and is one of the most commonly performed surgical procedures. Bausch & Lomb produces both intraocular lenses (IOLs) and surgical equipment used in cataract surgery, and is currently launching new products in both categories. new line of acrylic IOLs marketed under the Akreos brand can be inserted through only a two millimeter incision, 33 percent smaller than most incisions today. In addition, the SofPort line of IOLS features technology that blocks harmful violet light. new microsurgery platform, Stellaris, promises better ergonomics and supports cataract surgery using incisions smaller than two millimeters, which makes it compatible with new line of IOLs.
Competitors in the cataract and vitreoretinal surgery segment include Alcon and Advanced Medical Optics.
Refractive surgery
Refractive surgery, also known as the LASIK procedure, involves using lasers to correct vision by permanently reforming the shape of the cornea. Bausch produces LASIK surgical equipment, including the Zyoptix laser system and Hansatome microkeratome, a surgical instrument used for cutting the cornea. However, consumer adoption of LASIK surgery is far less than that of contact lenses. As LASIK surgery is permanent, it cannot be used with changing prescriptions, and consumers risk irreversible vision damage. Recent advances in contact lens technology, such as the 30-day silicone hydrogel lenses, further diminish the market for LASIK. Correspondingly, refractive surgery products constitute a minor fraction of total revenue.
Buyout
On May 16, Bausch & Lomb announced plans to enter into a merger agreement with the private equity firm Warburg Pincus, in a transaction valued at $3.7 billion in cash. Warburg Pincus will pay shareholders $65.00 per share in cash, which represents a premium of 26% over the stock price during the preceding month. Bausch & Lomb will no longer be a publicly traded company.
The buyout is subject to shareholder and regulatory approval before the deal is finally closed. Meanwhile, Bausch may solicit for higher bids from other firms, but is bound by a $40 million break-up fee. The possibility of a higher bid has driven stock prices above $65.00.
Trends and Forces
Product liability and recall
Companies in the health products industry face significant liabilities if a product is later found to be defective or produce adverse reactions. Even though such adverse effects are previously unknown and impossible to predict, the company may be forced to recall products or face litigation. Bausch & Lomb's recall of its MoistureLoc lens cleaning solutions represents a significant setback for the company, negatively affecting market share and brand image.
MoistureLoc recall
On May 15, 2006, Bausch & Lomb recalled lens cleaning products containing MoistureLoc after it was associated with increasing the risk of developing fusarium keratitis, a rare corneal fungal infection that may result in loss of vision. MoistureLoc is an additive in ReNu lens cleaning solutions that increases comfort for the wearer. ReNu lens cleaning solutions had leading market share prior to 2006, but lost 23.6% of the market within 10 weeks of the MoistureLoc recall. In addition to lost revenue from MoistureLoc products, the recall increased consumer uncertainty in other products unrelated MoistureLoc, negatively affecting sales of other lens cleaning solutions and contact lenses. The recall set back new product development, as many new products contained MoistureLoc. Bausch expects several hundred lawsuits beginning in the summer of 2007, including from 59 patients who required cornea transplants to restore vision.
In an unrelated incident, Bausch recalled certain batches of its ReNu multipurpose solution due to elevated levels of trace iron that led to discoloration, on March 6, 2007. Unlike in its MoistureLoc recall, this concern did not represent a health risk and was not due the formulation of the product.
Product development
Developing a new product is a time-consuming and costly endeavor. In 2006, Bausch & Lomb spent a total of $197 million in research and development in its five business segments. All of products are subject to regulation by government authorities, such as the FDA in the United States. In addition to the cost of designing a new product, substantial resources must be spent to establish its safety and efficacy according to regulations. The research and development process, and especially ophthalmic research due to stringent regulations, is inherently uncertain, as products face being delayed or rejected by regulation authorities. Candidate new products may not complete the development process after significant resources have been invested.
Before the MoistureLoc recall, MoistureLoc had been one of most promising technologies in its lens care business. Since many new lens care products in pipeline contained MoistureLoc, the recall halted many of future prospects for development. Without MoistureLoc, it is a continuing challenge for Bausch to create new products in face of competition.
Consumer shifts to newer technology
Companies aim to align their new product development with changes in consumer demand, one of which is the adoption of new technology. It may be difficult to predict which markets will be most profitable in the future. Bausch & Lomb is well positioned to benefit from the increased adoption of silicone hydrogel contact lenses and ocular vitamins.
Silicone hydrogel lenses
Traditional soft lenses are made from a polymer hydrogel material. Although they are comfortable to wear, the polymer limits the amount of oxygen that can pass through to the eye. As a result, traditionally contacts must be removed every night to maintain eye health.
On the other hand, new silicone hydrogel lenses, such as PureVision line, replaces the polymer with silicone, which has 5 to 6 times greater oxygen permeability. In addition, the surface of silicone hydrogel lenses retain more moisture than traditional counterparts, providing increased comfort. PureVision lenses are approved for 30-day extended wear without removal or cleaning and are much more convenient for the consumer. Consumers are switching to silicone hydrogel lenses over traditional contacts for health and convenience.
Bausch is focusing development in its contact lens business on its PureVision silicone hydrogel products, which have experienced strong double digit growth.
Ocular vitamins
Age-related macular degeneration (AMD) is one of the leading causes of blindness in the elderly, affecting more than 10 million adults in the U.S. The center portion of the retina known as the macula often thins with age, potentially leading to loss of vision. Until recently, AMD was often accepted as an inevitable effect of age, as no treatments were available. However, a 10-year trial conducted by the National Eye Institute demonstrated that high levels of ocular vitamins can reduce the risk of developing AMD by 25 percent.
Currently, Bausch controls 80% of the ocular vitamins market, which is projected to grow at double-digit rates. PreserVision ocular vitamins are the only treatment proven effective in fighting age-related vision loss. This result of the study significantly boosts consumer confidence in PreserVision products and is extensively cited in marketing campaigns, further solidifying lead in the market.
Health insurance
Changes in health care coverage may impact on sales. If an insurance program changes its policies and removes coverage for a certain treatment, sales are likely to decrease. pharmaceutical and surgical products are affected by changes in health coverage. For example, over the last several years, major health insurance companies, including the government insurance plans Medicare andMedicaid, set more stringent policies for reimbursements of cataract surgery and intraocular lenses. products in this market are negatively affected, as health care providers and patients became more reluctant to pay for products that are not covered by insurance. The profitability of elective products and procedures not eligible for reimbursement, such as LASIK equipment, are more at risk to economic fluctuations as a result.
Comparison to Competitors
Bausch & Lomb faces competition in each of its business segments:
<autowikidata/>
Contact lens
CIBA Vision Corporation (a Novartis subsidiary), CooperVision, and Vistakon Inc (a Johnson & Johnson subsidiary) are major competitors in the contact lens market. All of major competitors offer contact lenses to treat most refractive eye disorders in both traditional and silicone hydrogel materials. Characteristics of lenses such as comfort and prescription availability largely overlap, although specific attributes such as wear time differ. Vistakon's Acuvue brand holds dominant market share. The Acuvue line of disposable contacts includes both traditional and silicone hydrogel materials, and directly competes with SofLens and PureVision. CIBA Vision's Focus Night and Day lens, which is the only other lens also approved for 30-day extended wear, competes directly with PureVision brand. Currently, Bausch is the only company to offer toric and bifocal lenses for 30-day extended wear.
U.S. Landscape for Silicone Hydrogel Contact Lenses
30 Day Continuous 7 Day Continuous Daily
Spheres Night & Day - CIBA, PureVision - B&L Acuvue Oasys, O2Optix - CIBA Acuvue Advance, Cooper Biofinity
Toric PureVision Toric - B&L O2Optix - CIBA Acuvue Advance for Astigmatism, Cooper Biofinity toric
Bifocal PureVision Bifocal
Lens care
Advanced Medical Optics (AMO), Alcon, and CIBA Vision Corporation are major competitors in the lens care market. Prior to 2006, ReNu products held a dominant market share in the lens care. However, Bausch lost 23.6% of this market share within 10 weeks of its MoistureLoc recall. competitors also faced problems with their lens care offerings, although the impacts of other recalls were much less than that of MoistureLoc. AMO had to recall certain batches of its Complete MoisturePlus brand due to bacterial contamination. Alcon recalled its Systane brand of lubricant eyedrops, also due to contamination. There have been rumors that Johnson & Johnson may enter the lens care market, which may put further pressure on market share.
Pharmaceuticals
Although pharmaceuticals is second largest segment by revenue, Bausch is a relatively small player in the ophthalmic pharmaceutical market, with only a 5% share. Only a fraction of pharmaceutical products are truly proprietary, and none represent major blockbuster drugs. Notably, Bausch controls 80% of the rapidly growing ocular vitamins market. (See Ocular vitamins)VVV
Surgical
Advanced Medical Optics (AMO) and Alcon are largest competitors in optical surgery products. AMO produces intraocular implants and the Sovereign line of cataract surgery products. Alcon produces the Infiniti Vision System for cataract surgery and LADARvision for LASIK refractive surgery. Bausch currently leads the market in LASIK systems sales, specifically with its Hansatome microkeratome, but sales have been stagnant due to a saturated U.S. market and slow adoption abroad.
Arlington Contact Lens Service, Inc (AC Lens) was formed in 1995 and launched in 1996 by Dr. Peter Clarkson in the back of an optometrist’s office on the campus of The Ohio State University in Columbus, OH[1]. AC Lens incorporated in the State of Ohio in 1998. In 2000, AC Lens acquired I-Ohio LLC in an exchange of private stock[2]. AC Lens now operates various websites including USA and United Kingdom based sites. Dr. Clarkson is a graduate of Southampton University in the UK and The Ohio State University College of Medicine.
On February 4, 2004, the Fairness to Contact Lens Consumers Act went into effect. This federal law requires that optical care providers release their patients' prescriptions to them. AC Lens was provided the opportunity to comment and suggest changes to the FTC on March 31, 2004[3]. The final ruling on the law was released by the FTC in July 2004[4]. In October 2004, the FTC released a A Guide for Prescribers and Sellers
Business Segments
Bausch & Lomb produces and markets eye-care products in five major categories: contact lenses, lens care, pharmaceuticals, cataract and vitreoretinal surgery, and refractive surgery. As distinct segments in the eye-care industry, this product diversification is one way in which the company protects itself from adverse trends in the industry. For example, a change in economic conditions or policy that reduces contact lenses revenue one year may be offset by growth in another segment.
Contact Lenses
Contact lenses represent most important business division, bringing in 31 percent of its total revenue. product portfolio includes traditional, disposable, multifocal (presbyopia correction), and toric (astigmatism correction) soft contact lenses as well as rigid gas permeable (RGP) contact lenses. Some of most popular lines of contact lenses are:
PureVision - One of newest brands, PureVision soft contact lenses are made from silicone hydrogel materials, which are more comfortable and healthier for the eye. As consumers are shifting more to this new technology, sales have experienced double-digit growth. Further growth is expected as the product launches in 2007 in Japan, the second largest contact lens market in the world. new development in contact lenses is focused on expanding the company's silicone hydrogel offerings. (See Silicone hydrogel lenses)
SofLens - The SofLens line of disposable contact lenses are made from traditional hydrogel materials, representing older technology. These lenses are available in toric and multifocal prescriptions, in a variety of disposable forms. Bausch recently expanded this brand with the SofLens Daily Disposable line, which offers a new aspheric optical design, allowing for crisper vision and more comfortable wear. However, SofLens Toric sales have declined due to competition from increased adoption of Baush's own PureVision Toric lenses.
MultiVision (RGP lens) - Unlike their disposable counterparts, rigid gas permeable (RGP) lenses are reused for long periods of time. They are less convenient and less comfortable than soft lenses, but offer better visual performance and specialty prescriptions that are not available for other types of contact lenses.
Contact lens sales declined by 3 percent from the previous year. Even though the contact lens division is separate from lens care, brand image was negatively impacted by the MoistureLoc recall, especially in the Asian market.
Competitors in the contact lens market include CIBA Vision Corporation, CooperVision, and Vistakon Inc.
Lens Care
ReNu is flagship brand of lens care products, including cleaning solutions, re-wetting drops, and saline solutions. ReNu had leading market share prior to 2006, but lost 23.6% of the lens care market within 10 weeks of the MoistureLoc recall. Furthermore, the increasing popularity of inexpensive disposable contact lenses has put pressure on the lens care market, because disposable contacts do not require as much care. For example, one of the primary benefits of daily disposable contacts is that no cleaning solutions are required. Current developments are concentrated in rebuilding brand image and reclaiming lost market share associated with the recall, and also expanding its offerings of multipurpose cleaning solutions, the only growing segment in the overall lens market.
Competitors in the lens care market include Advanced Medical Optics, Alcon, and CIBA Vision Corporation.
Pharmaceuticals
Pharmaceutical products, which includes generic and branded drugs, eyedrops, ocular vitamins, and over-the-counter medications, is second largest business segment. Among pharmaceutical products are Lotemax and Alrex, ophthalmic steroids used to treat ocular inflammation, and PreserVision, a line of ocular vitamins. Bausch holds dominant share in the rapidly growing market of ocular vitamins. This may be a direction important to the development of pharmaceuticals division, as a recently concluded 10-year study suggests eye vitamins may be effective in treating age-related vision loss. (See Ocular vitamins)
In 2005, Bausch acquired a majority stake in CT Freda, a Chinese ophthalmologic pharmaceutical company. With 20% market share in the Chinese market, CT Freda is already established and established company, and is growing rapidly at 15% annually. While pharmaceutical division grew by 13% in 2006, CT Freda accounted for 9% of that growth. In addition, the company shows potential for great profitability, with operating margins above 30%. As a result, CT Freda is likely to become a key player in pharmaceuticals division in the future.
Competitors in pharmaceuticals is fragmented due to the variety of medications.
Cataract and vitreoretinal surgery
A cataract is the clouding of the eye's lens, and is a commonly associated with aging. Cataract surgery involves removing the cloudy lens on the eye and replacing it with an artifical intraocular lens, and is one of the most commonly performed surgical procedures. Bausch & Lomb produces both intraocular lenses (IOLs) and surgical equipment used in cataract surgery, and is currently launching new products in both categories. new line of acrylic IOLs marketed under the Akreos brand can be inserted through only a two millimeter incision, 33 percent smaller than most incisions today. In addition, the SofPort line of IOLS features technology that blocks harmful violet light. new microsurgery platform, Stellaris, promises better ergonomics and supports cataract surgery using incisions smaller than two millimeters, which makes it compatible with new line of IOLs.
Competitors in the cataract and vitreoretinal surgery segment include Alcon and Advanced Medical Optics.
Refractive surgery
Refractive surgery, also known as the LASIK procedure, involves using lasers to correct vision by permanently reforming the shape of the cornea. Bausch produces LASIK surgical equipment, including the Zyoptix laser system and Hansatome microkeratome, a surgical instrument used for cutting the cornea. However, consumer adoption of LASIK surgery is far less than that of contact lenses. As LASIK surgery is permanent, it cannot be used with changing prescriptions, and consumers risk irreversible vision damage. Recent advances in contact lens technology, such as the 30-day silicone hydrogel lenses, further diminish the market for LASIK. Correspondingly, refractive surgery products constitute a minor fraction of total revenue.
Buyout
On May 16, Bausch & Lomb announced plans to enter into a merger agreement with the private equity firm Warburg Pincus, in a transaction valued at $3.7 billion in cash. Warburg Pincus will pay shareholders $65.00 per share in cash, which represents a premium of 26% over the stock price during the preceding month. Bausch & Lomb will no longer be a publicly traded company.
The buyout is subject to shareholder and regulatory approval before the deal is finally closed. Meanwhile, Bausch may solicit for higher bids from other firms, but is bound by a $40 million break-up fee. The possibility of a higher bid has driven stock prices above $65.00.
Trends and Forces
Product liability and recall
Companies in the health products industry face significant liabilities if a product is later found to be defective or produce adverse reactions. Even though such adverse effects are previously unknown and impossible to predict, the company may be forced to recall products or face litigation. Bausch & Lomb's recall of its MoistureLoc lens cleaning solutions represents a significant setback for the company, negatively affecting market share and brand image.
MoistureLoc recall
On May 15, 2006, Bausch & Lomb recalled lens cleaning products containing MoistureLoc after it was associated with increasing the risk of developing fusarium keratitis, a rare corneal fungal infection that may result in loss of vision. MoistureLoc is an additive in ReNu lens cleaning solutions that increases comfort for the wearer. ReNu lens cleaning solutions had leading market share prior to 2006, but lost 23.6% of the market within 10 weeks of the MoistureLoc recall. In addition to lost revenue from MoistureLoc products, the recall increased consumer uncertainty in other products unrelated MoistureLoc, negatively affecting sales of other lens cleaning solutions and contact lenses. The recall set back new product development, as many new products contained MoistureLoc. Bausch expects several hundred lawsuits beginning in the summer of 2007, including from 59 patients who required cornea transplants to restore vision.
In an unrelated incident, Bausch recalled certain batches of its ReNu multipurpose solution due to elevated levels of trace iron that led to discoloration, on March 6, 2007. Unlike in its MoistureLoc recall, this concern did not represent a health risk and was not due the formulation of the product.
Product development
Developing a new product is a time-consuming and costly endeavor. In 2006, Bausch & Lomb spent a total of $197 million in research and development in its five business segments. All of products are subject to regulation by government authorities, such as the FDA in the United States. In addition to the cost of designing a new product, substantial resources must be spent to establish its safety and efficacy according to regulations. The research and development process, and especially ophthalmic research due to stringent regulations, is inherently uncertain, as products face being delayed or rejected by regulation authorities. Candidate new products may not complete the development process after significant resources have been invested.
Before the MoistureLoc recall, MoistureLoc had been one of most promising technologies in its lens care business. Since many new lens care products in pipeline contained MoistureLoc, the recall halted many of future prospects for development. Without MoistureLoc, it is a continuing challenge for Bausch to create new products in face of competition.
Consumer shifts to newer technology
Companies aim to align their new product development with changes in consumer demand, one of which is the adoption of new technology. It may be difficult to predict which markets will be most profitable in the future. Bausch & Lomb is well positioned to benefit from the increased adoption of silicone hydrogel contact lenses and ocular vitamins.
Silicone hydrogel lenses
Traditional soft lenses are made from a polymer hydrogel material. Although they are comfortable to wear, the polymer limits the amount of oxygen that can pass through to the eye. As a result, traditionally contacts must be removed every night to maintain eye health.
On the other hand, new silicone hydrogel lenses, such as PureVision line, replaces the polymer with silicone, which has 5 to 6 times greater oxygen permeability. In addition, the surface of silicone hydrogel lenses retain more moisture than traditional counterparts, providing increased comfort. PureVision lenses are approved for 30-day extended wear without removal or cleaning and are much more convenient for the consumer. Consumers are switching to silicone hydrogel lenses over traditional contacts for health and convenience.
Bausch is focusing development in its contact lens business on its PureVision silicone hydrogel products, which have experienced strong double digit growth.
Ocular vitamins
Age-related macular degeneration (AMD) is one of the leading causes of blindness in the elderly, affecting more than 10 million adults in the U.S. The center portion of the retina known as the macula often thins with age, potentially leading to loss of vision. Until recently, AMD was often accepted as an inevitable effect of age, as no treatments were available. However, a 10-year trial conducted by the National Eye Institute demonstrated that high levels of ocular vitamins can reduce the risk of developing AMD by 25 percent.
Currently, Bausch controls 80% of the ocular vitamins market, which is projected to grow at double-digit rates. PreserVision ocular vitamins are the only treatment proven effective in fighting age-related vision loss. This result of the study significantly boosts consumer confidence in PreserVision products and is extensively cited in marketing campaigns, further solidifying lead in the market.
Health insurance
Changes in health care coverage may impact on sales. If an insurance program changes its policies and removes coverage for a certain treatment, sales are likely to decrease. pharmaceutical and surgical products are affected by changes in health coverage. For example, over the last several years, major health insurance companies, including the government insurance plans Medicare andMedicaid, set more stringent policies for reimbursements of cataract surgery and intraocular lenses. products in this market are negatively affected, as health care providers and patients became more reluctant to pay for products that are not covered by insurance. The profitability of elective products and procedures not eligible for reimbursement, such as LASIK equipment, are more at risk to economic fluctuations as a result.
Comparison to Competitors
Bausch & Lomb faces competition in each of its business segments:
<autowikidata/>
Contact lens
CIBA Vision Corporation (a Novartis subsidiary), CooperVision, and Vistakon Inc (a Johnson & Johnson subsidiary) are major competitors in the contact lens market. All of major competitors offer contact lenses to treat most refractive eye disorders in both traditional and silicone hydrogel materials. Characteristics of lenses such as comfort and prescription availability largely overlap, although specific attributes such as wear time differ. Vistakon's Acuvue brand holds dominant market share. The Acuvue line of disposable contacts includes both traditional and silicone hydrogel materials, and directly competes with SofLens and PureVision. CIBA Vision's Focus Night and Day lens, which is the only other lens also approved for 30-day extended wear, competes directly with PureVision brand. Currently, Bausch is the only company to offer toric and bifocal lenses for 30-day extended wear.
U.S. Landscape for Silicone Hydrogel Contact Lenses
30 Day Continuous 7 Day Continuous Daily
Spheres Night & Day - CIBA, PureVision - B&L Acuvue Oasys, O2Optix - CIBA Acuvue Advance, Cooper Biofinity
Toric PureVision Toric - B&L O2Optix - CIBA Acuvue Advance for Astigmatism, Cooper Biofinity toric
Bifocal PureVision Bifocal
Lens care
Advanced Medical Optics (AMO), Alcon, and CIBA Vision Corporation are major competitors in the lens care market. Prior to 2006, ReNu products held a dominant market share in the lens care. However, Bausch lost 23.6% of this market share within 10 weeks of its MoistureLoc recall. competitors also faced problems with their lens care offerings, although the impacts of other recalls were much less than that of MoistureLoc. AMO had to recall certain batches of its Complete MoisturePlus brand due to bacterial contamination. Alcon recalled its Systane brand of lubricant eyedrops, also due to contamination. There have been rumors that Johnson & Johnson may enter the lens care market, which may put further pressure on market share.
Pharmaceuticals
Although pharmaceuticals is second largest segment by revenue, Bausch is a relatively small player in the ophthalmic pharmaceutical market, with only a 5% share. Only a fraction of pharmaceutical products are truly proprietary, and none represent major blockbuster drugs. Notably, Bausch controls 80% of the rapidly growing ocular vitamins market. (See Ocular vitamins)VVV
Surgical
Advanced Medical Optics (AMO) and Alcon are largest competitors in optical surgery products. AMO produces intraocular implants and the Sovereign line of cataract surgery products. Alcon produces the Infiniti Vision System for cataract surgery and LADARvision for LASIK refractive surgery. Bausch currently leads the market in LASIK systems sales, specifically with its Hansatome microkeratome, but sales have been stagnant due to a saturated U.S. market and slow adoption abroad.
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